Exhibit 10.02


 


WellPoint Health Networks Inc.


1999 Executive Officer Annual Incentive Plan


 


Pursuant to the authority under Section 4 of the WellPoint Health
Networks Inc. 1999 Executive Officer Annual Incentive Plan (the “EOAIP”),
the Committee under the EOAIP has the authority and discretion to administer
and interpret the EOAIP.  The Committee
desires to clarify certain provisions of the EOAIP, as described below, in
order to avoid unintended duplication of benefits.  Capitalized terms used herein, unless otherwise defined herein,
shall have the same meaning as set forth in the EOAIP.


 


Participants under the WellPoint Health
Networks Inc. Officer Change-in-Control Plan, as amended and restated through
December 4, 2001 and as may be amended from time to time (the “CIC Plan”),
may, under the terms of the CIC Plan, become entitled to a “guaranteed annual
bonus” for the fiscal year in which occurs a “change in control” (as defined in
the CIC Plan) in accordance with Section 2.2 of the CIC Plan, or a “pro-rated
bonus” for the fiscal year in which occurs an “involuntary termination” or
“constructive termination” (as defined in the CIC Plan) in accordance with
Section 3.7 of the CIC Plan.  A bonus
payable to a participant under the EOAIP (a “Participant”) in respect of
the same period is not intended to duplicate, nor to be in addition to, a bonus
payable to such Participant in accordance with the terms of Section 2.2 or
Section 3.7 of the CIC Plan.


 


Accordingly, the Committee desires to clarify
the EOAIP such that, if any Participant under the EOAIP becomes entitled under
the terms of the CIC Plan to a “guaranteed annual bonus” (which may be a
pro-rated bonus) pursuant to Section 2.2 of the CIC Plan in respect of a fiscal
year in which occurs a qualifying “change in control,” the guaranteed annual
bonus that is paid to the Participant in accordance with Section 2.2 of the CIC
Plan will be deemed to be the award for such Participant under the EOAIP in
respect of such fiscal year, and the Participant shall not be entitled to an
additional bonus under the EOAIP in respect of such fiscal year.


 


Similarly, the Committee desires to clarify
the EOAIP such that, if any Participant under the EOAIP becomes entitled under
the terms of the CIC Plan to a “pro-rated bonus” pursuant to Section 3.7 of the
CIC Plan in respect of the fiscal year in which occurs the Participant’s
“involuntary termination” or “constructive termination” (as defined in the CIC
Plan), the pro-rated bonus that is paid to the Participant in accordance with Section
3.7 of the CIC Plan will be deemed to be the award for such Participant under
the EOAIP in respect of such fiscal year, and the Participant shall not be
entitled to an additional bonus under the EOAIP in respect of such fiscal year.


 

















 


In all cases, only one bonus can be paid to a
Participant under the EOAIP in respect of any given fiscal year (or in respect
of any portion of a given fiscal year), and in no event shall any Participant
be entitled to more than one bonus under the EOAIP in respect of any given
fiscal year (or in respect of any portion of any given fiscal year). Thus, if
an “involuntary termination” or “constructive termination” occurs for any
Participant during the fiscal year in which a qualifying “change in control”
occurs, then the Participant will be eligible for an award in respect of the
pro-rated guaranteed annual bonus provided for in Section 2.2 of the CIC Plan,
and will not additionally be eligible for an award in respect of the pro-rated
bonus provided for under Section 3.7 of the CIC Plan.


 


The EOAIP currently permits the Committee to
establish payment schedules for bonuses under the EOAIP, and the Committee has
the authority to provide for a pro-rated bonus to Participants who terminate
employment prior to the payment of a bonus as a result of a reduction in force
commencing in the fourth quarter of a fiscal year (and the prior year’s bonus
award and a pro-rata bonus award if such termination occurs between the start
of the next fiscal year and payment of the prior year’s bonus).  The Committee desires to clarify the EOAIP
such that, if any participant terminates employment after the fiscal year in
which occurs a qualifying “change in control” (as defined in the CIC Plan), but
within 36 months following such qualifying “change in control,” and therefore
becomes entitled under the terms of the CIC Plan to a pro-rated bonus pursuant
to Section 3.7 of the CIC Plan in respect of the year of termination, the bonus
that is paid to the participant in accordance with Section 3.7 of the CIC Plan
will be deemed to be the award to such Participant under the EOAIP in respect
of the fiscal year in which occurs the Participant’s termination of employment,
and the Participant shall not be entitled to an additional bonus under the
EOAIP in respect of such fiscal year (but may be entitled to a bonus under the
EOAIP in respect of the preceding fiscal year in accordance with the terms of
the EOAIP).  Participants who terminate
employment as a result of a reduction in force as described above but who are
not eligible for a pro-rata bonus under Section 3.7 of the CIC Plan in respect
of the year of termination may nonetheless be eligible to receive a bonus under
the EOAIP in accordance with the terms of the EOAIP and this clarifying
document.


 


 


Date: June 28, 2004


 


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